"No man is above the law and no man is below it: nor do we ask any man's permission when we ask him to obey it." T.R.
Representing the voice of little people.

Thursday, March 7, 2013

Two Admit Roles in Mortgage Fraud Conspiracy and Money Laundering

CAMDEN, NJ—A former property manager admitted today to conspiring to
defraud financial institutions and launder stolen funds as part of a $15
million mortgage fraud scam that used phony documents and “straw
buyers” to make illegal profits on overbuilt condos, U.S. Attorney Paul
J. Fishman announced.
Last week, a Georgia man also admitted to conspiring to defraud
financial institutions and launder stolen funds as part of the same
scam.
Timothy Ricks, 45, of East Orange, New Jersey, pleaded guilty today
to a superseding indictment charging him with one count of conspiracy to
commit wire fraud and one count of conspiracy to commit money
laundering. Orlando Allen, 47, of Fayetteville, Georgia, pleaded guilty
to the same crimes on February 20, 2013. Both Ricks and Allen entered
their guilty pleas before U.S. District Judge Jerome B. Simandle in
Camden federal court.
According to documents filed in this case and statements made in court:
Ricks and Allen were among 11 defendants arrested in July 2012 and
charged with conspiracy to commit wire fraud and conspiracy to commit
money laundering. Ricks and his conspirators located oceanfront
condominiums overbuilt by financially distressed developers and
negotiated a buyout price with the sellers. They then caused the sales
prices for the properties—located in Wildwood Crest and North Wildwood,
New Jersey, other locations in New Jersey, and in Naples, Florida—to be
much higher than the buyout price to ensure large proceeds. Other
defendants helped conceal the true sales prices of certain properties
through inflated sales contracts and sale and finder’s fee agreements.
Ricks and Allen recruited straw buyers to purchase those properties
at the inflated rates. The straw buyers had good credit scores but
lacked the financial resources to qualify for mortgage loans. The
conspirators created false documents, such as fake W-2 forms, pay stubs,
bank statements, and investment statements, to make the straw buyers
appear more creditworthy than they actually were in order to induce the
lenders to make the loans.
Ricks and his conspirators caused fraudulent mortgage loan
applications in the name of the straw buyers, including the supporting
documents, to be submitted to mortgage brokers that the brokers knew
were false. Once the loans were approved and the mortgage lenders sent
the loan proceeds in connection with real estate closings, Ricks and his
conspirators took a portion of the proceeds, having funds wired or
checks deposited into various accounts they controlled. They also
distributed a portion of the proceeds to other members of the conspiracy
for their respective roles.
The wire fraud conspiracy charge carries a maximum potential penalty
of 30 years in prison and a $1 million fine. The money laundering
conspiracy charge carries a maximum potential penalty of 10 years in
prison and a $250,000 fine. Ricks’ sentencing is scheduled for November
8, 2013. Allen is scheduled to be sentenced August 8, 2013.
U.S. Attorney Fishman credited special agents of the FBI, under the
direction of Acting Special Agent in Charge David Velazquez in Newark;
and IRS–Criminal Investigation, under the direction of Acting Special
Agent in Charge Shantelle P. Kitchen, Newark Field Office, for their
roles in the ongoing investigation.